1. Field of the Invention
This invention relates generally to automated computer processing of invoices, checks, and money transfers.
2. Description of the Related Art
For years companies have been trying to move transactions into an electronic system. Large businesses have the resources and scale to justify the installation of new electronic systems. However, for a large segment of small and medium size enterprises (SMEs), such attempts have not fared well. This is because it is not cost effective for SMEs to install a dedicated system and there is no standardized transaction system to allow the sharing of costs among many different businesses. For example, each bank offers its own web site payment option, and companies such as Quicken offer either online or check printing or manual check writing as payment methods. However, invoice entry is entirely manual. As a result, it is still the general practice for businesses to send paper invoices to customers, which the customers then process manually.
Very often companies pay by check. Sometimes a check refers to an invoice. However, often the reference is unclear to the receiver. For example, the company issuing the check may use an internal reference number rather than the invoice number, or there may be some other problems that make it difficult for the receiver to match the check to its parent invoice.
When a payor sends a check for payment or for deposit to an account, the check may end up being deposited in an incorrect account, either by mistake or by intent. The risk is even greater for payments and deposits made via electronic payment services because there is no signature involved in electronic payments, making people more inclined to commit fraud. In addition, because there are fewer controls in place for electronic payments, the possibility for errors is greater.
Companies generally prefer to receive checks in a check lockbox (also referred to simply as a lockbox), which typically refers to a service that receives checks for its clients via mail, opens the mail, processes the checks, deposits the money into the clients' accounts, and creates documentation for the clients' accounting departments. Even though many attempts have been made to reduce the amount of labor required, the above process remains labor-intensive and therefore costly. One example situation that requires manual intervention is simultaneous duplication of identification numbers. Such a situation occurs when multiple clients start to use the same accounting software at the same time. As a result, multiple clients are likely to generate invoices with the same invoice numbers and payor numbers. Manual intervention is generally necessary in such a situation to avoid bookkeeping errors and misassigned checks.
There are commonly five options available to effect payments between accounts at different banks: (1) check payments, (2) electronic checks, (3) EFT (Electronic Funds Transfer) or ACH (Automated Clearing House) payments, (4) wire transfer, and (5) third-party bill payment services. Check clearing, although nominally one to three business days, often can take longer with out-of-state banks EFT and ACH typically take between one and three business days and are not widely adopted because of the complexity of managing information of the banks and accounts. Wire transfers typically are expensive and complex to initiate. Third-party bill payment services typically pull money electronically from the payor and send money to the payee via one of the first four options. Sometimes it takes a third-party bill payment service up to seven days to transfer money such that the service provider can guard against credit risk at the payor.